Garuda Said to Mull More Airbus A330s, Weigh A350 Versus 787 (1)

PT Garuda Indonesia (GIAA), the national carrier, is negotiating with Airbus Group NV (AIR) to buy more A330s, two people familiar with the discussions said.

The talks involve purchasing as many as 10 A330s, one of the people said, declining to be identified as the negotiations are private. A330s cost between $221 million and $245 million depending on the model. The Jakarta-based airline is also considering buying more twin-aisle planes for which it will choose between Airbus’s A350 and Boeing s 787 Dreamliner, the person said.

The Indonesian carrier, which said last year it may purchase 250 aircraft in the decade ending 2025 to tap rising travel demand in Southeast Asia, will likely wrap up a decision on the twin-aisle planes in coming weeks, one of the people said. It has also been studying the potential purchase of Airbus’s superjumbo A380, though a decision won’t be made before federal elections later this year, the person said.

“The A330 purchase is a signal of many things,” said Paul Yong, director of research at DBS Vickers Securities in Singapore. “With new planes and improved focus on safety, I think definitely they will look to re-enter the market in Europe.”

Asian Airlines

From Indonesia to Vietnam, carriers in Southeast Asia are buying new aircraft as about 600 million people -- or the combined population of the U.S., Germany and Brazil -- fly more. Boeing and Airbus, the world’s two biggest planemakers, are both counting on Asian airlines to buy more aircraft in the next two decades as economic growth in the region enables more people to take flights.

Pujobroto, a spokesman for Garuda, declined to comment today. Discussions with customers remain confidential, said Airbus spokeswoman Marcella Muratore in an e-mail.

Garuda already has 18 A330s operating in its fleet, according to Airbus’s website.

In November, Chief Executive Officer Emirsyah Satar said the national carrier may purchase more planes. The new aircraft are to help expand the fleet and retire older aircraft, Satar had said. Garuda aims to have about 350 aircraft by 2025, up from a fleet of 194 planes by 2015, Satar said in November.

PT Lion Mentari Airlines, the nation’s biggest carrier, already has 700 planes on order and expects to have ordered 1,000 aircraft within two to three years, its Chief Executive Officer Rusdi Kirana said in March.

Nordic Aviation

In October, the flag carrier Garuda said it will lease as many as 35 ATR 72-600 turboprop aircraft from Nordic Aviation Capital to modernize its regional fleet. Garuda has signed a firm commitment for 25 of the planes, with options for 10 more, ATR said in a statement Oct. 1. The deal is worth more than $840 million.

The turboprop planes will help Garuda increase its services to remote areas of Indonesia as the ATRs can land on airports with shorter runways. The aircraft, which can seat up to 74 passengers, will accommodate 70 in Garuda’s configuration, said ATR, which has also sold its planes to Indonesia’s PT Lion Mentari Airlines.

About a 100 ATR aircraft will be operating in Indonesia in the next two years as the planemaker has won more than 85 orders from the country since 2008, it said in the statement.

The emergence of Southeast Asian low-cost carriers such as Lion Air and AirAsia Bhd. (AIRA) have helped fuel demand for flying by making it cheaper.

The two have ordered 764 planes worth $73.8 billion at list prices since 2011. By the end of this year, Lion Air and state-controlled Garuda will surpass Singapore Airlines Ltd. (SIA) as the region’s biggest carriers by fleet size, the CAPA Centre for Aviation, which advises airlines, said last year.